Bank of America raised its rating on Facebook (NASDAQ: FB) from Neutral to Buy and increased its price objective from $23 to $31.

Bank of America commented, "While we were cautious on FB's mobile transition and expectations built into valuation in our June initiation report, 3Q results suggest that FB can effectively grow revenues while usage transitions to mobile platforms from PC. Importantly, FB exited 3Q with ~20% of ad revs. on mobile devices (up from 5% in 2Q), while total ad revenue growth accelerated in 3Q to 43% ex-FX from 33% in 2Q. Yes, PC based ad revs. fell 3% q/q, but we think this was advertiser spend migrating to mobile, US rev. per user was up 20% y/y. While caution is certainly warranted on likely selling pressure around the upcoming lock up dates (10/29, 11/14 and 12/14; $20bn of stock becomes unlocked), we are focusing on fundamentals and recommend the shares at current levels with a 12-month price objective at $31.